BenefitsPLUS acquires stake in group-buying Site Koovs

NEW DELHI: Delhi-based BenefitsPLUS, an online employee benefits and rewards programme service provider, has invested over $2 million and acquired a controlling stake in group-buying website, Koovs. Just two weeks ago, BenefitsPLUS acquired its competitor, Snowball eRetail Services. BenefitsPLUS CEO Paul Shoker said the investment in Bangalore-based Koovs was to enter the business-to-consumer (B2C) segment.

BenefitsPLUS, a wholly-owned subsidiary of technology venture Digivive Services, was started in 2010 and is a members-only site which offers discounts on a number of products and services to employees of member companies as part of custom-made rewards programmes. Koovs offers discounted daily deals and has over 400,000 registered members.

Vikramjit Singh Sahaye , marketing director at BenefitsPLUS said the company opted for an acquisition as organic growth would have taken longer. “We plan to optimise our expertise in areas like marketing and operations, but will continue as independent entities ,” he added. While the group-buying segment within e-commerce emerged only in 2009-10 , there are already 20 such sites in the country — half of which have operations in multiple cities. “It is inevitable that this daily deal market will consolidate,” said Shoker.

The industry has seen a number of acquisitions and venture funds have also shown interest in investing in this segment. Earlier this year, Snap Deal, which has emerged as a front runner in this space with four million users, received $12 million venture investment from Nexus Venture Partners and IndoUS Venture Partners. Around the same time global heavyweight , Groupon, entered the Indian market by acquiring So Sasta.

In March this year, Mobstreet, which was shut down in December 2010 reportedly due to lack of funds, was acquired by Groffr, which focuses on real estate and high-ticket deals like automobiles, jewellery and watches. Gurgaon-based Snowball, set up in 2009, is an e-retailer that is accessible only to employees of corporates who are members on the site. After the acquisition , Snowball merged with BenefitsPLUS and will now operate as a single company. BenefitsPLUS, which is targeting revenue of Rs 100 crore in FY2011-12 , intends to expand to other segments within e-commerce and is considering further acquisitions.